Hay growers and dealers will have fewer Western dairy clients in 2013. But hay export demand will be strong – especially alfalfa hay to China. That’s according to Seth Hoyt, market analyst and author of The Hoyt Report newsletter.
“As a hay grower or hay dealer, if you’re selling direct to (California) dairies, you’re going to have fewer to sell to,” said Hoyt at the California Alfalfa & Forage Symposium held Dec. 10-12 in Sacramento. Nearly 100 dairies there exited the business in 2012, he said in quoting estimates from state dairy organizations.
“One hay dealer from Hanford (CA) told me last week that last winter he was selling hay to 11 dairies. This winter, there are two of those dairies left.”
Baled hay exports from California ports in 2012 shot up 23% from the 2011 figure, and China was the main driver. Dairies there will continue to require dairy-quality alfalfa hay into 2013 and beyond, said Hoyt, who expects 2013 exports to China to be double this year’s levels.
The United Arab Emirates will likely be a good alfalfa hay customer, and the Saudi Arabian market also shows potential. But exports to Japan declined by 5% in 2012 compared to 2011 figures. Timothy hay exports to that country increased sharply after 2011 Tsunami effects reduced Japanese grass hay production.
A poor Australian oat-hay harvest last year also helped boost timothy hay as well as sudangrass hay exports to Japan in 2012. “The outlook for next year is that Australia’s oat-hay crop looks to have very good quality. The problem is its yield is down about 25-30% in volume.”
Hoyt predicted a supreme-quality $220-230/ton price to come out of the Imperial Valley’s first alfalfa cutting next spring, down from his earlier prediction of $240-250. But he stressed that it was made cautiously because milk prices are so uncertain. Experts have been estimating California milk-price increases to $20-22/cwt from December through the first half of next year, but instead they’re trending downward.
USDA milk mailbox prices for September, just released, show California at $17.36/cwt and Wisconsin, also a major cheese-producing state, at $20.48. Milk production in September was down 3.9% in California and up in Wisconsin by 3.5%.
For more of Hoyt’s comments, see our January issue of Hay & Forage Grower, scheduled to hit mailboxes the middle of the month.